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The 2009 draft stated: "The Corporation underestimated the complexity of the Maximo consolidation project and this is the main reason for the $12.9 million increase in the project budget . . . [and] advises that significant management resources have been directed to the project to address the problems, including the replacement of the project managers within the Corporation and supplier."

The documents reveal that Sydney Water management crossed out that line and replaced it with: "The Maximo project continues to track to the schedule and budget revised in 2008."

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In an explanatory note to NSW auditor-general Peter Achterstraat, a staff member states: "[Sydney Water] was adamant that this paragraph was incorrect and needed to change as this incorrectly referred to the replacement of Sydney Water and supplier project managers."

In the final report released publicly, the reference to the replacement of managers had been omitted.

Sydney Water also objected to the statement: "The Corporation still ranks amongst the lowest recyclers, on a percentage basis, when compared to other water retailers in Australia."

It called the statement misleading because it ignored the fact that Sydney Water recycles more by volume and more drinking water than water utilities in other states.

In the final report the critical line was omitted for an explanation worded closely to the Sydney Water explanation.

Chris Hartcher, shadow special minister of state, said the documents proved there was "no integrity" in any government document under Labor.

"The doctoring of this report should serve as a warning to anyone who believes that government reports are stating the facts should think again," Mr Hartcher said.

"What we have here is a systematic rewriting of a report to ensure only the information that government wants out out are put out."

Due to be completed in August, the Maximo project has been put back 14 months.

A spokesman for Sydney Water said the complexity of the overhaul had made it virtually impossible to arrive at a precise cost when the project was budgeted.